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Wednesday, August 15, 2007

Bridges and Taxes

I'm a bit late to the party, regarding the recent proposal to increase the gas tax to help with the cost of repairing our decaying road infrastructure. Simply put, it seems like a no-brainer, and it would be an awful shame if the Congress and White House didn't deal with this, before the news cycle shifts away from the Minneapolis bridge collapse to more recent events. If we can't find a way to fund more urgent renovation of the decades-old infrastructure in this country, then we will deserve all the comparisons to spoiled rich kids burning through their inheritance from wiser parents.

I understand the arguments about the economic impact of raising taxes and the prospect that even a modest gas tax increase would be the camel's nose under the tent, setting the stage for a steeper gas tax hike to curb demand, or a carbon tax. That just doesn't wash, when you consider the current federal gasoline tax. Never mind the usual comparisons to European fuel taxes, which generally serve entirely different purposes, anyway. Look at how it stacks up against our own state gasoline taxes. They average 27 cents per gallon, after backing out the federal tax of 18.4 cents per gallon, and range from a low of 8 cents per gallon in Alaska to a high of 42.4 cents in New York. The current federal gasoline tax is less than what all but seven of our states collect on the fuel, and it has not changed materially since 1993, when President Clinton raised it by four cents and suffered serious political consequences.

Fourteen years worth of inflation have completely dissipated the value of that four cent increase, so that we are now contributing fewer real dollars to the highway trust fund than we did when Bill Clinton took office. If you consider the escalation of construction costs in just the last few years, including the cost of steel and concrete that have been affected by the enormous construction boom in Asia, the situation looks much worse. In other words, the five-cent increase proposed by members of Congress after the I-35W bridge came down would effectively only get the federal highway trust fund back to the purchasing power that it had in 1997, when it was last raised by 0.1 cents per gallon.

I don't think I'm naive about the political implications of raising the gas tax, one of this country's great sacred cows. But it's also clear that voters are willing to hold elected officials accountable for failing to address predictable disasters, or respond to them appropriately. Even if we need to call it a one-time inflation-indexing of the highway trust fund revenue, rather than a gas tax increase, we need to get on with it. This is an issue with no political agenda other than common sense. It would be a modest down-payment on reestablishing the kind of no-nonsense ethic that will be required if we are to have any hope of handling the much more complex and controversial challenges we face.